Melbourne, Australia-based Mesoblast Ltd. received $40 million from Tasly Pharmaceutical Group Co. Ltd. after completing a collaboration in China for a pair of Mesoblast heart drug candidates.

As part of the strategic partnership, Tasly has received exclusive rights in China for MPC-150-IM for preventing and treating chronic heart failure and MPC-25-IC for preventing and treating heart attack. The Tianjin, China-based drug distributor will fund all development, manufacturing and commercialization of both medicines in the country.

The payment comprises a $20 million up-front technology access fee and a $20 million equity purchase for which Mesoblast has issued 14,464,259 fully paid ordinary shares to Tasly.

Mesoblast would receive $25 million upon receiving certain regulatory approvals for the products in China. The cellular drug developer could also get double-digit escalating royalties on net product sales, as well as six additional escalating milestone payments upon the achievement of certain sales thresholds.

Mesoblast and Tasly will set up a joint steering committee, with equal representation, to accelerate developing and commercializing the heart therapies in China.